ON THE UP – SOFTWARE PRICE INCREASES ON THE WAY FOR CUSTOMERS

Published: 14 September 2021

If you’re a user of Cloud-based subscription services – which is now the majority of our clients – you may have heard rumours of future software price increases across a variety of platforms.

Here at Lifeline IT we’ve been anticipating changes and this has recently been confirmed with an announcement from Microsoft that from 1st March 2022, a number of its Office 365 and Microsoft 365 licenses will increase in cost.

The exact details of the UK increases are yet to be confirmed, but they are likely to be similar to US price rises, which range from around 9% to 25% depending on the product.

Whilst Microsoft is the first to announce cost changes, it is likely that other subscription services will follow suit over the next few months. This is only to be expected as more businesses and consumers have become reliant on this type of monthly IT payment model, rather than purchasing a one-off license.

This change in IT behaviour has been confirmed by our own customer research, which looked at the growing area of IT subscription services, such as Cloud storage, iTunes, Dropbox and Adobe software. Almost five out of 10 admitted they have more subscription services than they did a year ago, with 46% believing they would be less expensive if they were one-off payments, rather than monthly/quarterly charges.[1]

Commenting on the increases, Lifeline IT’s Daniel Mitchell said: “It’s not surprising increases are coming as prices have remained stable for quite some time. When moving to a cloud-based model, customers do have to be aware that price increases do happen and to budget for them.

“If you buy a software license as a one-off annual cost, these increase in price every couple of years, so a rise in subscription-based services is inevitable. That’s why when considering changes or replatforming, we try to work with our clients to assess the costs and benefits of cloud-based systems, and review the most cost-effective way of paying for licensing.”

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[1] Lifeline IT Annual IT Trends Report 2020

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